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Essential for Template CR3 Mandatory for All banks & Clients considering the need to address IT gaps in loss mitigation through Fintech interaction products or services for cost/benefit assessment accounts, highlighted by FED Letter SR 23-4 dated June 7, 2023, shared for BCBS PSMOR (sound practices).

Log in and benefit from Early Bird Pricing to Update your Hedge Accounting for TPRM based on OPE25 Cost/Benefit Valuation Accounts for CRE22.

A. Fill IT gaps without changing anything in the existing system:

This is the Fintech system of cross-cutting and cross-sector interaction of the standard approach required for banks and financial market investors to articulate CRE 22- Calculation of RWAs for the recognition of credit risk mitigation, such as collateral and guarantees, to OPE 25- Calculation of RWAs for operational risk taking into account the economic capital (EC) reinforcing customer deposit accounts based on the SOX ratio, new capital structuring ratio (Economic Capital/Incentive Pay) to anticipate, monitor and supervise internal financial performance based on the "General criteria on loss data identification, collection and treatment" that has been integrated into the consolidated Basel Framework in force on January 1, 2023.

An information system in which IT, without cross-cutting interaction capability mobilizing the Total Paid Workforce as the driving force for loss mitigation, focusing only on each business line, business unit or function, as is currently the case, is disconnected from risk management and corporate governance in the organizational chart sense (ISACA Journal. Volume 6, January 2013).

B. Compliance Focus:

. The FED SR 23-4 Interagency of June 7, 2023, shared to address IT gaps for Cross- Cutting and Cross-Sector Interaction essential for BCBS PSMOR (Sound Practices). 

. The ECB October 2023 guidance highlighting the benefit of having the technical capacity of operational risk management to reduce credit risk exposure. 

. The European law of April 24, 2024, in force on January 1, 2025, in the 27 Member States, the laws of Canada, the United Kingdom, Hong Kong and other jurisdictions expected in Q4 2024.

. The general rule of the CRM Reference Guide to be provided by the bank for contracts considering the insurer's ORSA strategy:

- “Written business line definitions must be clear and detailed enough to allow THIRD PARTIES to REPLICATE the business line mapping. Documentation must, among other things, clearly motivate any exceptions or overrides and be kept on record” (BCBS, 2019).

. Beyond Micro, Measuring with Supervisory Bodies the TEMPLATE CR3 accounts Impact on Public Debt.

. The update requirement makes obsolete all non-accounting software for the required standard approach:

The Mandatory CR3 Template for all banks meets the insurer's ORSA since it covers all CRM techniques recognized in the applicable accounting framework.

- The BCBS DIS40 - Credit Risk of December 15, 2019, is recalled in Annex XVIII, Disclosure of the use of credit risk mitigation techniques of all supervisors and regulators: European Banking Authority, Union Bank of India, OSFI of Canada, Bank of England, etc.). 

C. Impact on Expected Losses (EL) & Expected Credit Losses (ECL)

The demo for comparative Cost-Benefit accounts of the financial performance of Risk Management based on the OPE30 - Advanced Measurement Approach which ceased to exist on 30 December 2022 to the financial performance of Risk Management of the Standardized Approach required from 1 January 2023 for both OPE25 (Calculation of RWA for operational risk) and CRE22 (Calculation of RWA for credit risk mitigation), which is provided by the TPRM Accounting Reference Guide to be attached by the financial institution to current credit and investment financing contracts, shows that:

. Pool bank 1 saw its total unencumbered cash accounts (Bank EC + Customer EC) go from "$0" before OPE25 to $9,685,274,442 after OPE25.

. Pool bank 2 saw its total unencumbered cash accounts (Bank EC + Customer EC) go from "$0" before OPE25 to $8,303,585,037 after OPE25.

. Pool bank 3 sees its total unencumbered cash accounts (Bank EC + Customer EC) go from "$0" before OPE25 to $8,499,635,572.

D. Menu for more, our Team and Reference Guide to banks:

1- Business objectives to achieve when partnering with us

2- Our Exceptional Competitive Networking Position

3- The best start-up offers based on the training Program with the University of San Francisco

4- Total paid workforce interaction training requirement (BCBS, Dec. 2017)

5-  Highlights of TPRM accounting interaction Fintech for Template CR3

6- Treasury TPRM Accounts Mitigating Public Debt Considering the Role of the IMF

7- Reference Guide to be attached to Micro financing contracts

8-  Interaction fintech is not subject to an authorization license.

9- Beyond Micro, Measuring with Supervisory Bodies the TEMPLATE CR3 accounts Impact on Public Debt.

10- Why train the Internal Team to perform Template CR3 Mandatory for All banks ? 

11- What will you learn by training the internal team ? 

12- Download Customer support Material


Catalog of our products and Services 

Capture décran 2022 07 03 à 15.19.42 (a) Certify and equip your business team for Operational Risk Capital (ORC) requirements.

(b) Standard OPE 25 - Calculation of RWA for operational risk, in force from January 1, 2023, now underpins the internal accounting and financial management strategy of Banks and Credit Risk Counterparties or CCR (insurance companies, industries and services, including local authorities) on the Economic Capital accounts and the SOX ratio to be provided to the investor considering the insurer's ORSA and the risk appetite threshold.

(c) The forecast management paradigm serving as the basis for the insurance of bank credit and the raising of funds on the stock market has thus changed: forecasting sales using past trade data is no longer sufficient with the OPE25. To be realistic, the quantitative approach (statistics and probabilities) for estimating the forecast turnover and future cash flow of a company, in particular the calculation of the growth rate, must now include in the use of historical data (of at least 5 years) and the future financial performance plan (over at least 3 years), the operational risk loss mitigation accounts determining its cost prices and the competitiveness of its products.

(d) The SOX ratio is the FinTech solution to the thorny problem of variable salary predictability or Incentivized Pay securing investments based on internal assurance(Financial Stability Board, June 27, 2017, and BCBS, June 2019).

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Serious Gaps in Skills and Tools Finally Addressed

US Federal Reserve, UK, EU, and central banks of all G20 countries aim to adopt last Basel III part by January 2023 with new requirements to be calibrated for “capital neutrality” BCBS, progress report on adoption of the Basel regulatory framework, October 2021, https://www.bis.org/bcbs/publ/d525.pdf

This Quick Guide is the culmination of the research and practical work of the network of academics and industries which has been set up worldwide to help banks and the credit risk counterparty business sectors to cross the threshold of OPE25 effective January 1, 2023.

- The issue is the economic capital accounts and the SOX ratio of predictability (forward-looking management) of variable salaries that banks and CCR should now provide for WCR and investment financing.

The difficulty to overcome is that, although the Human Resources function is an eminently transversal function of corporate accounting, neither the Human Resources Managers nor the other corporate functions have been trained to perform the interaction tasks of their workstation to act in real time as an organizational team based on the operational risk appetite threshold. The compartmentalization of teaching in universities and MBA programs in specialized disciplines have not solved the problem of real-time integration of HR-Finance processes.

As a result, few graduates today have the cross-cutting or vertical skills required to act, in real time, from their workstation in accordance with the pyramid shape of the organization chart as an organization team based on the risk appetite threshold to create value.

Why do you need to take this step?

Your financial ratios to be completed under OPE25:

  • You must now add the SOX Ratio to the 4 ways to assess the performance of your business (liquidity ratios, efficiency ratios, profitability ratios and financial leverage ratios)

The recognition of the coverage of operational risk losses by insurance cannot exceed 20% before considering the economic capital accounts", BCBS, October 2010.

It derives the SOX ratio (Economic Capital/ Variable Salary or Incentivized Pay) to be calculated for monitoring internal financial stability as part of the insurer's Own Risk and Solvency Assessment (ORSA).
Until now, two ratios were used to measure a company's leverage (the ratio borrowings/equity and debt ratio). The SOX ratio complements the main balance sheet ratios (Financial autonomy ratio, Net debt ratio, General liquidity ratio and Stable employment coverage ratio).

The urgency is to fill the gaps in the internal assurance you give to the investor for economic capital based on your historical income statements and the added value of the Total Paid Workforce impacting your future financial performance.
This requirement affects all aspects of your access to credit and investment finance, including major aspects of the insurance industry [Trade credit insurance, Investment insurance, General Insurance, Inward Reinsurance (Financial Risk), Export credit insurance, Comprehensive Trade Credit Insurance, Investment Insurance for equity investors, etc.].

The challenge of the SOX is that when the company pays bonuses or variable salaries, and the turnover varies little or stagnates, or when the company can neither identify nor mitigate its operational risk losses, this is a business that may be in arrears on its debt and may not be able to borrow additional funds to ensure its survival. A long period of slow growth can indeed render the company insolvent.

Where to provide investors with this OPE25 data that was missing until now in your financial publications?

1/ Complete your HR critical financial ratios that matter to the investor, as we did below with FinTech V1 for a banking group (add lines 8-18 for missing financial security accounts):









Net income group share per share (in $)







Diluted net income group share per share (in $)







Operating coefficient (in %)







International solvency ratio (in %)







Return on equity (ROE)







Workforce at the end of the year

76, 305 

75, 811 

73, 817 

75, 711 


Average workforce

71, 308 

72, 510 

72, 524 

72, 520 

75, 975 


Accounts of the Human Resources added value of loss mitigation based on the risk appetite threshold (we also say "HR efficiency") that this bank should program and publish on a 3-year plan under OPE25


Current average workforce




Current average net income (group share) (b)




Current contribution per employee to average net income (Group share)




Estimated Absolute VaR (EL + UL) = Gross loss =loss before recoveries (BCBS, Dec. 2017)



Potentially Recoverable Losses (PRL) or recovery = Absolute VaR - Risk Appetite Threshold (Net loss) calibrated at 0.02% for 99.98% PRL



N : 30 %

N+1 : 60 % 

N+2 : 100 % 


Free Gross Cash Flow per employee at the new risk appetite threshold on a 3-year plan





Economic Capital or Net Cash Surplus of its loss control system on a 3-year plan for 67% of PRL



Variable salaries or Incentivized Pay (Earnings bonus for employees mobilized by the cross-cutting dynamics of the organization on a 3-year plan for 33% of PRLs)



SOX ratio of the capital structure (Economic Capital/Variable Salary or Incentivized Pay) securing investments and the predictability of variable salaries over a 3-year plan



 Measurement Data of the Future Financial Performance of Fixed Wages [Average of the last five years in millions in line with the logical historical basis of the new standardized approach to operational risk (BCBC, Dec. 2017)].



Sources of correction data

Income statement (Historical bank data)

Thousands $






Net banking income



20,152 000 



Net profit



5,458 000 



Net income (group share)






Gross HR financial ratios provided (without calculating HR efficiency)

Workforce at the end of the year

76, 305 

75, 811 

73, 817 

75, 711 

Average workforce

71, 308 

72, 510 

72, 524 

72, 520 

75, 975 

2/ Then complete your financial hedging instruments:

A hedging financial instrument is a derivative financial product which makes it possible to reduce or cancel the risk inherent in a hedged item called the underlying. Many underlying financial instruments can be the subject of a hedging operation, we quote in particular, shares, bonds, currencies, raw materials, rates.

You should under OPE25 add Economic Capital (EC) among the main risks below that can impact an underlying financial instrument (such as stocks, bonds, currencies, commodities, rates):

  • Issuer risk: linked to the quality and prospects of the person who issued the financial instrument.
  • Market risk: related to general variations in the economy and financial markets.
  • Liquidity risk: this is the fact of not being able to convert a financial instrument into immediate liquidity for lack of a buyer on the market at a given time.
  • The interest rate risk related to the financial commitment.

FinTech tools to automate OPE25 cross-cutting accounting interactions (standard approach).

We provide in SaaS mode, two essential platforms for the cross-cutting interactions required for SOX Internal Control accounts to the OPE25 standard [the CEO platform for forward-looking management and the CFO platform to manage internal financial performance in real time and provide the accounts non-GAAP reporting required for the SOX Ratio (Economic Capital/ Incentivized Pay)]:






Free starting point technology:

FinTech SAF platform of the CEO or SENIOR MANAGEMENT for Board forward-looking management decision-making based on the SOX Ratio

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Board decision making system

1- Current average net income (group share)

2- Current contribution per employee to average net profit (Group share)

3- Absolute VaR estimate (EL + UL) = Gross loss = Loss before recoveries (BCCB, Dec 2017)

4- Current Potentially Recoverable Losses (Absolute VaR - Risk Appetite Threshold or Net Loss calibrated to the % of the business sector's risk appetite threshold

5- Gross Free Cash Flow (Economic Capital) per employee at the new risk appetite threshold on a 3-year plan

6- Economic capital or net cash surplus of the loss control system over a 3-year plan for 67% of the PRL (Not for distribution: SEC, April 2018)

7- Variable remuneration or Incentivized Pay (Bonus for employees mobilized by the transversal dynamic of the organization on a 3-year plan for 33% of PRLs)

8- SOX ratio of the capital structure (Economic Capital/Variable Salary or Incentivized Pay) securing investments over a 3-year plan

9- Data for measuring the future financial performance of the fixed salary, basis for calculating the differences to be considered for the fixed salary evolution grid.

 Regulatory requirements to do this:

For EU, article 9a, of the May 17, 2017, European Directive (“Shareholder Rights II”): “The remuneration policy shall contribute to the company’s business strategy and long-term interests and sustainability and shall explain how it does so. Where a company awards variable remuneration, the remuneration policy shall set clear, comprehensive, and varied criteria for the award of the variable remuneration. It shall indicate the financial and non-financial performance criteria, including, where appropriate, criteria relating to corporate social responsibility, and explain how they contribute to the objectives set out in the first scope, and the methods to be applied to determine to which extent the performance criteria have been fulfilled. It shall specify information on any deferral periods and on the possibility for the company to reclaim variable remuneration.”

For USA, SEC Non-GAAP Financial Measures of April 4, 2018: “Companies are permitted to present non-GAAP performance measures on a per-share basis, such as adjusted EPS (Adjusted earnings per share), but they are prohibited from presenting non-GAAP measures of liquidity or cash flow, such as free cash flow, on a “per-share basis”. 

CFO's FinTech SAF (Internal Loss Mitigation)

FinTech V2-1 is the CFO's FinTech module to coordinate and drive internal financial performance in real time to meet working capital requirements (WCR) and investment profitability.

With V2-1, the CFO calculates the sum of Potentially Recoverable Losses (absolute VaR - Risk appetite threshold), plans, distributes the expected economic capital from services and workstations based on their consumption of resources or budget, monitors, and provides for real time feedback, periodic reporting. 

This SOX requirement is long-standing:

The US Senate vote creating “The Human Capital Assessment and Accountability Framework (HCAAF)” was passed in 2002, i.e., the same year as SOX Act whose Section 902 (Corporate Responsibility for Financial Report) was to be considered with Sections 404 (Operational Risk Control), 302 (Financial Reports and Internal Controls), 409 (Feedback in Real Time) and 802 (Criminal Requirements for Falsification of Documents).

HRD FinTech SAF (Employee engagement surveys module)

HRD's internal financial performance mission (BCBS Principles 4 and 5-6, Sep 2008) requires two FinTech modules (V2-2a and V2-2b).

With V2-2a, the HR function:

a) Conducts surveys to anticipate the deterioration of the social situation to provide data on the motivation and mobilization of the total paid workforce.

b) Ensures integration of corporate learning to manage turnover and have data on knowledge gaps to identify hiring needs.

c) Uses the internal dashboard to monitor and support the improvement of the financial performance and purchasing power of employees indexed on five socio-economic indicators which are levers on which each employee can act in real time.

d) Uses the internal dashboard to take immediate and effective action to address risks based on six key areas of socio-economic improvement:

- Labor conditions

- Work organization

- Consultation, communication, coordination (3C)

- Integrated training

- Management of working time and

- Strategic implementation.

HRD FinTech SAF (Psychosocial risks module)

With V2-2b, the HR function carries out the periodic survey to provide alert data on the HR dashboard according to six areas recommended in 2012 (Report of the International College of Expertise on the monitoring of psychosocial risks: www college-risquespsychosocial-travail.fr):

a) Work requirements

b) Emotional requirements

c) Autonomy

d) Margins of maneuver

e) Social and labor relations

f) Different value conflicts.

FinTech SAF of the OM function (Workstations Loss Treatment module)

Operational Managers' internal financial performance mission for "General criteria on loss data identification, collection and treatment" as required for OPE25- Calculation of RWA for operational risk (version effective from 01 Jan 2023) requires two FinTech modules (V2-3a and V2-3b) to drive and provide non-GAAP reporting of real time internal financial performance feedback measuring the economic capital value added of the total paid workforce.

With V2-3a, the OM function accompanies with heads of operational units, weekly procedures and processes documented by daily record sheets for the identification, collection and treatment of internal loss data caused by:

  • Absenteeism,
  • Work accident,
  • Quality defects,
  • Direct productivity gaps (overtime and overconsumption of materials) and
  • Know-how gaps (including lack of versatility).

Operating structurally, these socio-economic indicators are taken together in the weighting system provided by the HRM. This FinTech module avoids the mistake of focusing excessive attention on the socioeconomic indicator of greatest concern without realizing that its costs are transferred to the other indicators.

FinTech SAF of the OM function (Employee Incentivized Pay module)

Through the automatically generated variable salary e-slip (e-bulletin), OM's FinTech V2-3b gives each employee the means to measure in real time, improve and enhance their internal performance, in particular the amount of the associated Incentive Remuneration by considering the five socio-economic indicators measuring its contribution to the collective result.

FinTech V2-3b is essential to measure the Incentive Pay Leverage Effect (IPLE) of the financial performance of variable remuneration distinct from that of fixed remuneration as now required by country regulations [see SEC Non-GAAP financial measures, April 4, 2018, or European Directive (EU) of May 17, 2017].

FinTech V2-3b avoids the inefficiency of distributing random amounts or the same reward amounts as the 13th month or exceptional bonus to all employees.

This module allows employees to manage 33% of Potentially Recoverable Losses (PRL) measured by the Incentivized Pay Leverage Effect (IPLE) or the added value of human capital required to calculate the SOX Ratio. The OM function thus avoids the dupe game translated by this well-known Russian joke under the USSR: “As long as the bosses pretend to pay us, we will pretend to work” (The Guardian, 2017).

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Essential billing and ordering:

FinTech base, Incentivized Pay e-bulletins or e-sheets (variable salaries) and certification

1/ Standard price of the Fintech base (The price is the same regardless of the total paid workforce of the company): $120,000 per year per company corresponding to 1% of the simulated economic capital (in comparison, an SAP ERP which does not generate no measured economic capital, costs $2,550 per user). You can pay your FinTech SAF base by monthly bank withdrawals for 12 months or by year in one go.

  • The use of the FinTech V1 base is free. 
  • The use of the FinTech V2 database is free during the certification period (You thus have 90 days to test its effectiveness and profitability since you pay until your first economic capital assessment, only the certification costs and the E-sheets Incentivized Pay).
  • For SMEs with at least 10 employees and public entities with a small workforce, the price to be paid for the FinTech base will be set at the end of the test period.

2/Incentivized Pay E-sheets: this is the instrument for measuring the financial performance linked to the variable salary under the regulations in force, in particular EU Directive of May 17, 2017, and SEC guidance of April 14, 2018: you will pay $6.06 per month per employee.

3/Cross-Cutting Interaction Skills Certification Cost:

The certification is an In-house training.

  • Number of managers (Loss Executives) to be expected (around 11: CEO, CFO, HRM and max 8 OM) = $900 per person. 
  • Number of team leaders or cash-generating units (1 per 20 employees) = $900 per person.

4/ Ordering:

A single order by the employer for all workstations to be connected and internal team members to be certified

Structural, regulatory, and technical requirements making this transversal risk management expenditure essential


1. It is the structural condition to operate all the workstations in the direction of the real-time organization chart based on risk appetite threshold as an organizational team.

2. The articulation of Corporate Accounting FinTech skills of all internal team workstations is essential to meet the "general criteria for identifying, collecting and processing loss data for the OPE - calculation of RWA for risk (OPE25 - Standardized operational approach).

The BCBS obliges you to do so by specifying that:

Any banking or non-banking activity that cannot be easily mapped in the business repository, but which represents an ancillary function to an activity included in the repository, must be attributed to the business line it supports. If more than one business line is supported by the ancillary activity, an objective mapping criterion must be used (BCBS, OPE25-Calculation of RWA for operational risk, First version of 15 Dec 2019).

The BCBS adds that the measurement system must "be able to support an allocation of economic capital for operational risk between the businesses so as to create incentives to improve the operational risk management of the businesses(BCBS, OPE25-Calculation of RWA for operational risk, First version of 15 Dec 2019).

3. The standardized operational risk approach impacting counterparty credit risk relies on now well-known corporate accounting procedures to connect operating units or cash-generating units (CGUs) to the board's internal financial performance plan. administration coordinated by the CEO in conjunction with the CFO:

3.1/ Any discrepancy must be linked to a simple and transparent socio-economic indicator available to all employees to act to mitigate the losses of the factors or causes of operational risk losses impacting the key ESG metrics.

3.2/ For banks in particular, the socio-economic indicators come under the heading “Other operating expenses” of the “Service” activity indicator, the typical sub-item “Losses incurred at the series of operational loss events that have not been provisioned/reserved in previous years” (BCBS, December 2017).

3.3/ For insurance companies and therefore for policyholders, the consideration of insurance and other risk transfer mechanisms should not exceed 20% of the operational risk capital required before the recognition of the economic capital generated by risk mitigation techniques (BCBS, Dec. 2010).

Our Networking references:

Publications and key meetings of our global university-industry network

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  • The 2020 World Finance Conference ($Malta)
  • The Society for Interdisciplinary Business Research (SIBR) 2020 conferences in OSAKA, SEOUL, and SYDNEY.
  • The 2020 management conference in Berlin (Germany) and
  • The 2020 international conference of Lyon-France in conjunction with the Academy of Management (AOM).


  • The Journal of Corporate Accounting and Finance, “Human capital management accounting issues for SOX compliance with Basel III final framework operational risk standards, USA, published on July 05, 2022, with the University of San Francisco and HCM Accounting Academy (Innovation Hub of LELE- HCM ACCOUNTING INDUSTRY INC.).
  • The book (449 pages) "Recent Developments in Asian Economics - International Symposia in Economic Theory and Econometrics" published in UK (Emerald Publishing) on March 1, 2021, with 54 universities coordinated by Harvard University (USA), the Center for Financial Stability (USA) and the Accounting Department of the University of San Francisco (USA).
  • The accompanying articles of Basel III of banks, as well as Solvency II and NAIC of insurance companies in 2013, 2014 and 2016 with ISACA Journal by academics from the FinTech SAF network of EU universities (Malta, UK, Germany) and US (New Jersey, and Georgia).

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Download Customer support Material

The accounting certification handbook

Customer Handbook for cash surpluses (economic capital) to be programmed on a three-year plan

Terms & Conditions [Legal conditions of use of HCM ACCOUNTING ACADEMY services: training and SaaS Intranet software)


Formalize your orders for pro-forma invoicing